Technical Analysis – Taiwan semiconductor meets familiar support area
August 22, 2023 10:26 am
Taiwan semiconductor’ stock (TSMC) turned upwards after hitting its 200-day simple moving average (SMA) at 89.45 last Friday, looking to repeat May’s bullish pattern.
The market seems to have reached oversold conditions as the stochastic oscillator and the RSI are now pushing for an upside reversal above 20 and 30 respectively. Monday’s close above the descending trendline is good news for the rebound, but it could be short-lived if the bulls are rejected at 95.20. In the event the price breaks that wall, the rally could pick up pace towards the 98.90 barrier, where the 50-day SMA is converging towards. Even higher, the bulls will need to preserve their strength above the tentative descending trendline at 103.00 to motivate more buying.
If sellers return, squeezing the stock below its 200-day SMA at 89.40, support could next develop around 85.35. Even lower, the price could face some stability within the 83.00-81.00 zone.
Summing up, TSMC’s stock has paused its latest decline near a familiar support area, creating hopes for a bullish reversal ahead of rival Nvidia’s quarterly earnings due after the market close on Wednesday.
Taiwan semiconductor’ stock (TSMC) turned upwards after hitting its 200-day simple moving average (SMA) at 89.45 last Friday, looking to repeat May’s bullish pattern.
The market seems to have reached oversold conditions as the stochastic oscillator and the RSI are now pushing for an upside reversal above 20 and 30 respectively. Monday’s close above the descending trendline is good news for the rebound, but it could be short-lived if the bulls are rejected at 95.20. In the event the price breaks that wall, the rally could pick up pace towards the 98.90 barrier, where the 50-day SMA is converging towards. Even higher, the bulls will need to preserve their strength above the tentative descending trendline at 103.00 to motivate more buying.
If sellers return, squeezing the stock below its 200-day SMA at 89.40, support could next develop around 85.35. Even lower, the price could face some stability within the 83.00-81.00 zone.
Summing up, TSMC’s stock has paused its latest decline near a familiar support area, creating hopes for a bullish reversal ahead of rival Nvidia’s quarterly earnings due after the market close on Wednesday.
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